Janaki (Tabu), the only daughter of Seth Durga Prasad Bharadwaj (Amrish Puri) and heir to his millions, elopes with Jayaprakash Paswan (Kamal Hasan), a dance choreographer's assistant.
After a few years, Janaki sues for divorce following little difference. Janaki is awarded the custody of their only child Bharthi (Baby Sana) and the father gets to meet his child once a week.
Angered and lonely, Paswan is ill advised by his friend Siraj-un-din (Nazar), kidnaps Bharthi and is caught. Now his weekly meetings with Bharthi are also concelled.
Paswan is desperate to be with his child when he sees an advertisement by his father-in-law seeking a Brahmin ayah for his grand daughter.
Being in films, Paswan seeks the help of a make-up friend Joseph (Johnny Walker) and transforms himself into a woman. Various forms of lies gets him the job. Now posing as Mrs. Lakshmi Godbole, Paswan is very happy to be with his daughter. The care and concern he shows towards the child earns him the admiration of Durga Prasad and the envy of other servants, especially BhanwariLallPandit (Om Pupri), Durga Prasad's secretary.
Durga Prasad gets a sudden heart attack and Lakshmi manages to reach him to the hospital in time. Durga Prasad and his daughter feel highly obliged to Lakshmi chachi. Durga Prasad's gratitude turns slowly to love and Durga Prasad proposes marriage to Lakshmi. In a terrible fix, Lakshmi Chachi invents a runaway husband. Paswan's house (chawl) owner HariBhai (PareshRAwal) also falls in love with Chachi. Paswan keeps the two old men at bay by very many subterfuges.
Janaki, influenced by Chachi realises that all her differences with her husband were flimsy and childish.
As she reaches out to her husband, she realises that Paswan was Chachi all the time. They both conspire to keep the secret and spare Mr. Bhardwaj the embarrassment of defeat.